For the first in a long time diesel fell to $ 4
For the first time in months, the average price of a gallon of diesel fuel has fallen below $5 nationwide.
According to the US Energy Information Administration (EIA), the price is $4.99.
National average diesel prices peaked at $5.72 a gallon on June 20, according to the EIA. During the same week, California diesel prices averaged $6.92.
At the same time, several retailers charged more than $7 per gallon. Carriers large and small alike faced challenges of higher fuel costs.
This time last year, a gallon of diesel fuel cost half as much – $ 3.29.
Nationwide, the highest diesel prices can be found in California at just over $6 a gallon. The lowest prices today are in Texas at just $4.59 a gallon.
Meanwhile, US benchmark crude for September delivery rose $1.75 to $90.76 a barrel on Monday. Brent crude for October delivery rose $1.73 to $96.65 a barrel.
Gas station prices may be lower now, but the long-term outlook for oil suggests low inventories will keep prices high.
“Russia-Ukraine is a factor, but…we were short on supplies,” Rob Haworth, senior investment strategist at US Bank Wealth Management, recently told CNN. “We would very much like the conflict in Russia and Ukraine to end. But I think in the near term we are still facing a global economy that is short of oil.”
The combination of higher fuel costs with lower freight rates on the spot market could be devastating for the smallest carriers.
In FTR’s June 30 Mid-Year Review, Steve Graham, FTR analyst, said: “We must not ignore the reality of inflation. The chances of a recession occurring next year are about 50/50.”
For smaller trucking companies, the hope is that fuel prices will stabilize somewhere below $5 a gallon.